OSK 1Q net profit down 22% on weak property, industrial segments

KUALA LUMPUR (May 26): OSK Holdings Bhd recorded a 22.05% drop in net profit to RM54.27 million for its first quarter ended March 31, 2017 (1QFY17) compared with RM69.62 million a year ago, as its property and industrial segments reported lower contributions, and its share of RHB Group's profit dropped.

Earnings per share fell to 3.92 sen from 5.03 sen, the group said in a filing to Bursa Malaysia yesterday.

Revenue was also down 13% to RM302.54 million from RM348.89 million.

Segmentally, OSK's property segment registered a 44% decrease in pre-tax profit to RM24.2 million as the group launched fewer projects in the quarter due to the subdued property market.

Meanwhile, the industries segment saw a 35% decline in pre-tax profit to RM6.09 million as it faced lower demand for power cables and an increase in financing costs.

However, OSK said the group's performance was partly cushioned by higher profit generated by its construction and capital financing businesses as it saw an increase in progress billing from its ongoing construction projects and higher fees from more loan disbursements in the quarter.

Going forward, OSK said its property development division would continue to drive sales in Malaysia and Australia, while the property investment business would contribute steady rental income despite the challenging retail market.

The group's financial services and investment holding segment, meanwhile, is expected to perform well following the trend of RHB Group's and capital financing division's performance.

Shares in OSK were up 1 sen or 0.62% to close at RM1.63 yesterday, with a total of 260,200 shares traded. The firm has a market capitalisation of RM2.26 billion. — theedgemarkets.com

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